When Kate Garraway’s husband, Derek Draper, fell ill during the first lockdown in March 2020, the couple had discussed assigning one another the power of attorney but hadn’t yet acted on the decision.
Left to care for their two children alone as well as deal with the household finances was tough. In particular, dealing with many bills and policies that were all in her husband’s sole name made a terrible situation even more distressing.
Popular TV presenter Kate Garraway has shared the story of her husband’s terrible experience of Covid with millions of people. She has also been candid about the difficulty she’s experienced due to the lack of power to access their joint savings, Derek’s bank or credit card accounts, or refinance their mortgage to help fund Derek’s care.
In an interview with the Times, she said her legal situation is “much more complicated” than if they had drawn up Lasting Power of Attorneys (LPA) so she could assume control of their affairs.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document used to grant someone you trust authority to manage your affairs if you’re unable to – usually through illness or incapacity.
While they are often associated with elderly people, as Kate Garraway will testify, it’s just as important for younger people to have an LPA in place too.
There are two types:
- A Health and Welfare LPA will cover your day-to-day life and any medical decisions or care you need.
- A Property and Financial Affairs LPA will cover the management of your savings and assets, paying bills, and claiming benefits.
As Garraway has proven with her heart-breaking story, putting a Property and Financial Affairs LPA in place now could give you and your family enormous peace of mind and is something everyone over 18 should do.
If you need further convincing, here are five more important reasons to set up your own LPA today.
1. Setting up an LPA is easier than you might think
LPAs are relatively easy to set up, but you can only do so while you have the mental capacity.
You can apply online or download the relevant forms from the government website. However, before you rush in, it’s wise to take professional advice from your solicitor or financial adviser. Please get in touch if you’d like to discuss your intentions before you sign on the dotted line.
The LPA will need to be signed by someone you trust. Alternatively, you could use a professional attorney such as a solicitor. They confirm that they understand the contents of the LPA and that no one has put you under pressure to sign.
Your LPA must be registered with the Office of the Public Guardian once the forms are completed.
2. It gives you the power to choose who you want to manage your affairs
An LPA allows you to choose who to name as your attorney(s). You can choose one or more people to act on your behalf and manage your affairs if you’re unable.
Knowing that you have someone you trust to look after things in the way you’d wish can give you invaluable peace of mind. It also means you can assign someone with appropriate experience or expertise.
You can also write specific restrictions into your LPA to make it clear what your attorney can and can’t do. For instance, you may wish to prevent your attorney from making decisions regarding your property or other specific assets you own.
As you get older you may find that dealing with your financial affairs, even if you have the mental capacity, isn’t how you’d prefer to spend your time. If so, you could consider using an LPA to hand over control so someone else can act on your behalf.
This may not be a decision you find easy to make. If you’d like to discuss your options with a financial professional, please get in touch.
3. Your affairs can be looked after without delay
With an LPA in place, your loved ones can step in and manage your affairs immediately.
As Garraway discovered, even if you’re married or in a civil partnership, your spouse isn’t able to deal with your financial affairs or decide about your healthcare if you lose the ability to do so.
Without an LPA, they won’t even have authority over any bank accounts in your sole name.
This could leave your family with the difficult and time-consuming task of applying for permission to take care of your affairs. To be able to deal with your affairs when you’re already incapacitated they will have to apply to the Court of Protection to become a deputy.
Aside from the additional stress, this process can also be time-consuming and expensive. It could take several months before a deputy is appointed, during which time your family would have no control over your finances.
As you have learned from Kate Garraway’s experience, acting now could save you and your family a huge amount of trouble and stress.
4. You can benefit from added flexibility in your financial affairs
As well as ensuring your financial affairs are managed according to your wishes, an LPA can provide a welcome level of flexibility when it comes to your wider financial planning.
For example, if you’re going to be spending some time overseas, you can use an LPA to appoint someone to manage your UK-based financial affairs. The same is true if you know you’re going into hospital for a period.
In each case, you can set up an Ordinary Power of Attorney for a temporary period to give whoever you nominate full legal authority to act on your behalf for a specific period of time.
An Ordinary Power of Attorney set up temporarily can be revoked or altered once you can prove that you have the mental capacity to reclaim control.
5. It’s impossible to predict the future
Unfortunately, accidents can happen at any time. No matter how careful or prepared you think you are, an accident could leave you with serious injuries and make it impossible to manage your affairs.
Many serious illnesses can also affect you without warning. According to the Stroke Association, someone suffers a stroke every five minutes and 100,000 people in the UK have a stroke each year.
Organising an LPA now could mean that you’re more prepared and should anything untoward happen, you and your family will have one less thing to worry about.
Ultimately, having an LPA gives you reassurance that no matter what may happen, you have things in place to ensure your financial wellbeing will be looked after.
Get in touch
If you’d like to discuss LPAs or other ways to help ensure your wealth is protected if anything happens to you, please get in touch.
Email contactme@kbafinancial.com or call us on 01942 889 883.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning and Lasting Power of Attorneys.
Approved by The Openwork Partnership on 9 February 2023.
